Salary vs Hourly Pay in BC: Do Salaried Employees Get Overtime?
I received a question recently asking about the difference between being paid hourly and being paid salary. When it comes to the BC Employment Standards Act, the answer often surprises people.
Frankly, it means almost nothing when it comes to overtime.
Many employees assume that if they are on salary, they are not entitled to overtime pay. That’s one of the most common misconceptions about employment standards in British Columbia.
In reality, salaried employees can still qualify for overtime just like hourly employees.
BC Overtime Rules: Salary vs Hourly
Under the Employment Standards Act in British Columbia, overtime eligibility is not determined by whether someone is paid hourly or on salary.
Employees are generally entitled to overtime when they work:
- More than 8 hours in a day, or
- More than 40 hours in a week
If those thresholds are exceeded, overtime rules can apply. This applies whether the employee is paid hourly or receives a salary.
Why Many People Think Salaried Employees Don’t Get Overtime
The confusion comes from certain exceptions in the Employment Standards Act.
The most common exception involves managers. Managers are typically exempt from overtime requirements because their roles often involve working beyond regular hours as part of running the business.
However, the important detail is this:
The government looks at the work you do, not just your job title.
Job Titles Do Not Determine Overtime Eligibility
Some employees are given the title of “manager,” but their day-to-day duties may not actually be managerial. Under employment standards, what matters is the duties being performed, not the title on the job description.
For example, true managerial duties might include:
- Hiring and firing employees
- Making operational decisions for the business
- Supervising staff with authority over scheduling or discipline
If those types of responsibilities are not part of the job, the employee may still qualify for overtime pay even if they are called a manager.
How Overtime Is Calculated for Salaried Employees
When a salaried employee qualifies for overtime, the government essentially works backward to determine an hourly rate. Employment standards will calculate what the employee’s equivalent hourly wage is based on their salary. Overtime is then calculated using that hourly rate.
So even if someone is paid a fixed salary, overtime can still apply if their role does not meet the exemption criteria.
The Key Factor: Job Duties
When it comes to overtime rules in BC, the most important factor is not:
- Whether someone is paid hourly
- Whether someone is paid salary
- Or what their job title says
The determining factor is the actual duties performed in the role.
If the duties are managerial, overtime rules may not apply. If the duties are not managerial, overtime protections can still apply regardless of how the employee is paid.
Understanding Employment Standards Protects Both Employers and Employees
Employment standards rules can be confusing, especially when payroll structures and job titles vary between businesses. For employers, understanding these rules helps avoid compliance issues and payroll mistakes. For employees, it ensures they receive the wages they are legally entitled to.
Questions About Payroll or Employment Standards?
At Kermode Accounting & Advisory, we regularly help businesses understand payroll rules under the BC Employment Standards Act, including overtime requirements and employee classification.
If you have questions about payroll, overtime, or employment standards in British Columbia, reach out anytime.
It’s always better to clarify the rules than to guess and risk getting it wrong.
